The total volume of mutual investments in the Eurasian region reached $46.1bn by the end of the first half of 2024, marking a 2% increase compared to 2022. Private companies continue to play a vital role, contributing 68% of the total mutual foreign direct investments (FDI), equivalent to $31.2bn.
Central Asia has become a key player in attracting investments, with its share surpassing 50%, amounting to $23.4bn.
The Eurasian Development Bank (EDB) released a report on mutual FDI, which now includes 13 countries, incorporating investment projects in Mongolia for the first time. The EDB’s Mutual Investment Monitoring (MMI) database tracks investment projects across the region, providing detailed information about accumulated investments and offering insights into sectoral and geographic trends.
Key Investment Trends and Figures
Kazakhstan, Uzbekistan, and Azerbaijan are the leading recipients of mutual investments in the Eurasian region. By mid-2024, Kazakhstan attracted $10.4bn (22.6%), Uzbekistan received $10.2bn (22.1%), and Azerbaijan garnered $5.8bn (12.6%). Together, these countries accounted for almost 60% of the total mutual FDI in the region. Notably, Kazakhstan experienced a record 17% increase in FDI by 2022.
Azerbaijan stands out for having the highest ratio of mutual investments relative to its GDP, with a figure of 6.6% by mid-2024, a significant increase from 4% in 2022.
Private businesses remain the primary source of mutual FDI, with 68% of investments coming from this sector. The raw materials industry continues to attract the largest share of private investments, accounting for 45% of the total private sector investments.
Sectoral Growth and New Projects
The raw materials sector remains the dominant area for mutual FDI, contributing 35.6% of the total investments, followed by manufacturing (15.2%) and transport and logistics (11.6%). The manufacturing sector has seen the largest increase in mutual FDI since 2022, with an additional $1.1 billion, bringing its total to $7 billion by mid-2024.
The agro-industrial sector has shown steady growth since 2016, increasing by an average of 6.7% per year. Since 2022, mutual FDI in this sector grew by $0.4bn, reaching $2.2bn by mid-2024.
In Central Asia, intraregional FDI reached $834mn by mid-2024, reflecting a 40% increase compared to 2022. The manufacturing sector saw the highest growth, with investments rising 2.5 times compared to 2022.
Key Players in Central Asia
Kazakhstan is the largest investor within Central Asia, accounting for 80% of the region’s total exported investments, equivalent to $671mn by mid-2024. Uzbekistan’s role as both an importer and exporter of capital is growing, with its investments rising 6.8 times from $24mn in 2022 to $164mn in 2024.
Medium-Term Trends
Looking ahead, the EDB report predicts the following medium-term trends in the Eurasian region:
- Greenfield projects will remain a priority for new investments.
- The manufacturing sector will continue to attract the most mutual investments.
- The agro-industrial sector will see ongoing growth in mutual FDI.
- Uzbekistan will increase its role as both an importer and exporter of capital.
- The role of Central Asia as a hub for mutual investments will continue to grow.
